SAN ANTONIO — An increase in labor, production and distribution costs cut into Harte Hanks' bottom line in the first quarter.

The San Antonio-based direct-marketing company earned $1.8 million, or 3 cents a share, on $132.7 million in revenue in the three months ended March 31. That compares with net income of $6.7 million, or 11 cents a share, on $132.4 million in revenue for the same period last year.

In a statement, the company said changes in its business have led to investments in personnel to generate revenue. But it also reported “headcount reductions” that resulted in payouts of about $1 million in severance.